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10 Benefits of Business Planning for all Businesses

By Tim Berry, Guest Blogger
Published: January 26, 2016 Updated: February 1, 2016

It's a shame that so many people think business plans are just for startups, or to back up loan applications, or for getting investors. The truth is that business planning offers serious benefits for everybody in business.

And I'd like to point out that none of these benefits require a big formal business plan document. A lean business plan (as in What Business Plan Type is Best for Me) is usually enough. It takes an hour or two to do the first plan, then just an hour or two to review and revise monthly.

Here are those top ten benefits.

  1. See the whole business. Business planning done right connects the dots in your business so you get a better picture of the whole. Strategy is supposed to relate to tactics with strategic alignment. Does that show up in your plan? Do your sales connect to your sales and marketing expenses? Are your products right for your target market? Are you covering costs including long-term fixed costs, product development, and working capital needs as well? Take a step back and look at the larger picture.
  2. Strategic Focus. Startups and small business need to focus on their special identities, their target markets, and their products or services tailored to match.
  3. Set priorities. You can't do everything. Business planning helps you keep track of the right things, and the most important things. Allocate your time, effort, and resources strategically.
  4. Manage change. With good planning process you regularly review assumptions, track progress, and catch new developments so you can adjust. Plan vs. actual analysis is a dashboard, and adjusting the plan is steering.
  5. Develop accountability. Good planning process sets expectations and tracks results. It's a tool for regular review of what's expected and what happened. Good work shows up. Disappointments show up too. A well-run monthly plan review with plan vs. actual included becomes an impromptu review of tasks and accomplishments.  
  6. Manage cash. Good business planning connects the dots in cash flow. Sometimes just watching profits is enough. But when sales on account, physical products, purchasing assets, or repaying debts are involved, cash flow takes planning and management. Profitable businesses suffer when slow-paying clients or too much inventory constipate cash flow. A plan helps you see the problem and adjust to it. 
  7. Strategic alignment. Does your day-to-day work fit with your main business tactics? Do those tactics match your strategy? If so, you have strategic alignment. If not, the business planning will bring up the hidden mismatches. For example, if you run a gourmet restaurant that has a drive-through window, you're out of alignment.
  8. Milestones. Good business planning sets milestones you can work towards. These are key goals you want to achieve, like reaching a defined sales level, hiring that sales manager, or opening the new location. We're human. We work better when we have visible goals we can work towards.
  9. Metrics. Put your performance indicators and numbers to track into a business plan where you can see them monthly in the plan review meeting. Figure out the numbers that matter. Sales and expenses usually do, but there are also calls, trips, seminars, web traffic, conversion rates, returns, and so forth. Use your business planning to define and track the key metrics.
  10. Realistic regular reminders to keep on track. We all want to do everything for our customers, but sometimes we need to push back to maintain quality and strategic focus. It's hard, during the heat of the everyday routine, to remember the priorities and focus. The business planning process becomes a regular reminder. 

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at leanplan.com .

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Is Your Small Business Mobile Ready?

By mbramble, Contributor
Published: January 20, 2016

More and more people are browsing, shopping, and doing business on their phones and tablets. Currently, 11.3% of the digital population uses mobile only, compared to 10.6% desktop only use*. This may not seem significant now but these numbers will continue to grow as mobile capabilities advance and mobile devices become more and more integral to day-to-day life.  Seriously, if you are not mobile ready you are missing an opportunity to connect with mobile users who may be future customers and partners.

So how do you get started? You see, mobile is really about your audience. Here are some tips to help you get started.

Optimize Your Website

There are simple steps that you can take to optimize your website. Not all devices have flash capability. Not using it or working with a flash alternative will make your site more compatible with all mobile devices. Extremely high-resolution photos and colored backgrounds can also hinder viewing. Optimize your photos for the web, so that they don’t take forever to load. Chances are your audience is not going to wait for that. In the same vain colored backgrounds can hinder, not help the image download process, so keep it simple.

Now as far as responsive vs. adaptive, that really depends on what your users are coming to your mobile site for. (More about personas below). If you are going with adaptive you’ll need user personas to understand where and what content to put on your mobile site.

Keep Online Listings Up-to-Date

When I’m not in front of my computer the first thing that I do when I’m looking for a restaurant, shop, or business referral is check out online reviews.

Make sure you update all your business directory listings to include a simple description of your services, your hours of operation, your phone number, your address and a link to your website. Additionally if there are any other industry specific databases, make sure that your information is uploaded there as well.

Build Personas

Mobile users have different goals and content priorities than desktop users ​and many times they prefer different content formats ​than desktop users. Putting together personas will help inform your mobile strategy. As previously mentioned if you are using an adaptive template, user personas are essential for ensuring you have the right content. Your mobile site analytics should also inform your content decisions as well.

Take a look at your contacts and identify trends about how they find and consume your content. Did they request a quote through your website? Were they referred through a friend? Or did they find you online? Your website analytics will also help you sort out these questions.

When creating forms for your website, use form fields that will help you capture important persona information. Take into consideration your sales team's feedback on the leads they're interacting with most. What generalizations can they make about the different types of customers you serve best?

Once you have all this information, identify patterns and use the personas to tailor your content.

*Source: comScore Media Metrix Multi-Platform, March 2015 (Traffic data captured by the platform)​

About the Author:

mbramble
Mariama Bramble

Contributor

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Franchises That Have It All

By FranchiseKing, Guest Blogger
Published: January 19, 2016 Updated: January 19, 2016

When looking for a franchise to buy, it’s important to find one that has it all. But, what does it mean to “have it all.” I’ll show you.

The Franchise Model

Franchising has been called the greatest business model ever invented, and with good reason.

It’s a wonderful way for people who’ve always wanted to be their own boss to do to so by leveraging someone else’s proven (hopefully) business system.

A lot of things go into a business system; especially one that is replicable by hundreds and sometimes even thousands of others. Let’s look at a few of them.

Great Products/Services

It all starts with quality. If the franchise you’re interested in offers a high-quality product or service, it’s much easier to get customers in the door. It’s also a lot easier to keep them coming back for more.

Product or service consistency is also important. It’s a big part of what makes franchising so successful.

A franchise that consistently offers a great product/service is a franchise I’d want to look into.

Strong Branding

All of the locations of the franchise you’re investigating should have the same look and feel. It goes into branding, and it’s what makes the business itself so replicable.

Good franchise research needs to include in-person visits with existing franchisees of the concept you’re interested in, so you can find out for yourself if the same look and feel exists. It’s a great way to see the franchise operation in action-one you could eventually own and operate. It’s also a wonderful way to check out the franchisors’ branding. You’ll be able to see first-hand if it’s consistent, which is another advantage franchising offers.

Strong System Technology

Today’s franchisors need to have robust technology in place to help them with things like:

  • Internal communication
  • Online training
  • System-wide sales tracking
  • Franchise development
  • Online marketing initiatives

Franchisors also need to make sure that their system technology is secure at headquarters and in each franchisees’ place of business.

When you’re out visiting franchisees ask them what they think about the technology that’s in place. After all, it’s part of what they’re paying for, and what you’ll be paying for if you become an owner.

Smart Executive Team

Travelling to franchise headquarters is a great way to see things in action; most franchisors require prospective franchisees to visit in-person as part of the franchisee approval process.

Formally called a “Discovery Day,” this day-long visit with the executive team at headquarters is a crucial part of the investigative process. It’s really where the rubber meets the road. There’s usually time for prospective franchisees to sit down with members of team-including the CEO. It’s a great time for you to ask about the state of their company and their vision for the future. You’ll quickly find out how smart* they are if you listen closely.

Having It All

No franchise operation is perfect. No franchise really has it all. Just find the best all-around one that fits what you want in a business.

As you look around at the different franchise opportunities that are available, try to find out (through research) how good they are in different areas.

Do they offer a great product or service?

Do they have a powerful brand-or are they at least well on their way to doing so?

Are franchisees satisfied with the technology they have access to?

Are the franchise executives smart? Innovative?

Does the company seem to be a well-oiled machine?

The best way to take advantage of franchising-as a business model, is to choose a franchise opportunity that excels in a significant amount of the things needed to run a successful franchise operation today.

If you can find one like that, maybe you can have it all. 

About the Author:

FranchiseKing
Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and recently launched Franchise Business University.

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5 Ways to Target the Right Audience

By mbramble, Contributor
Published: January 12, 2016 Updated: January 22, 2016

What is a business without customers? The most important step in business planning is finding out who your customers are, what their needs are, and why they want to buy from you. Is the market right for you? Are you targeting the right customers? Do they identify with your value proposition and your brand promise? If you don’t know the answers to these questions you may want to revisit the planning stage.

1) Be clear about whom you are and your unique value proposition

Sounds obvious, but more than just a product or service, what are you really selling? What problem are you solving and why would your product or service resonate with your customers? What unique benefits do you offer? This is what you must lock down in your brand promise.

Think about it. Take a look at some of the businesses and brands that you resonate with. What about their brand keeps you coming back for more? Certainly you have other options to choose from, so what is it that keeps you coming back for more, what is their unique benefit? What they are really selling is a combination of product, value, ambience (or not), and brand experience.

Take a look at this blog about the power of emotional marketing. This blog offers tips on how you can develop and capitalize on these elements of value.

2) Stay Focused

One of the pitfalls of not defining what you have to offer is that you can quickly become a jack-of-all-trades and master of none. This can have a negative impact on business growth.

Think about it from the perspective of a consumer. How often do you see marketing flyers promoting the service of a local handy man who claims to be an expert in everything from drywall installation to plumbing repairs, and so on? Or the restaurant that offers Chinese food, pizza, and subs. You wouldn’t choose either of these, because they have no specialty.  You’ll win a lot more business with a strong strategic focus on something specific.

3) Identify Your Niche

The flip side of being a jack-of-all-trades is finding your niche and playing to your strengths within that niche.  Creating a niche for your business is essential to success. For example, say you want to quit your day job and become a freelance writer. You know there’s a need in the market for a trustworthy, reliable, and consistently good technical writer – and clients are willing to pay a certain price point for that quality and value.

Now you could simply advertise your services on an online freelance marketplace, as many do, and hope to pick up any business from any customer anywhere on the map. But by identifying your niche and choosing to attract customers who will value your services, you will quickly build on that niche and be on the path towards business success. 

4) Find Your Target Customer

Identifying and finding your ideal target customer is a process few businesses can’t afford to get wrong. A few simple steps can help get you along the way and are covered here in this SBA guide: Identifying Your Target Market.

5) Tailor your brand promise

Now that you’ve identified your target market you’ll need to craft a message that reaches and speaks to that market while reinforcing your brand identity. It not only explains what you have to offer, why you’re different, and why anyone should buy from you, but it should communicate the promise you’re making the customer. This promise speaks to the integrity of your business.

The moral of the story is be clear, be specific, and communicate your unique value. Here are some additional resources to help you on your way.

Established business owners: how did you establish your target market? What are some of the lessons you learned?

What to Include in Your Market Analysis

Company Description

10 Tips to Help You Build and Grow a Standout Small Business Brand

About the Author:

mbramble
Mariama Bramble

Contributor

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Top 10 Traits of Successful Business People

By Marco Carbajo, Guest Blogger
Published: January 12, 2016 Updated: January 12, 2016

Setting out to become an entrepreneur requires a great deal of determination and hard work. You will need to set goals, take action, assess your progress, make adjustments, and have a clear financial map drawn out.

Motivational speaker, personal finance instructor, and self-help author Tony Robbins says, “Success leaves clues, and that people who produce outstanding results do specific things to create those results.” Regardless of your definition of success in business, there are common traits that are shared among many successful business people. Here are the top ten most common characteristics:

  1. Passionate – “If you just work on stuff that you’re passionate about, you don’t have to have a master plan with how things will play out” says Mark Zuckerberg, founder of Facebook. Successful entrepreneurs aren’t driven by money, they are passionate about their idea, by the opportunity to solve a problem and make a difference.  
  2. CourageousStarting a business and accepting the fact that you will have challenges on the way takes courage. It shouldn’t surprise you that being fearless is a trait shared among many successful entrepreneurs. The good news is everyone has the capacity for being courageous. 
  3. Trustworthy – Building trust is paramount to the success of a business. Successful business owners know the value of building trust. They understand that people don’t invest in companies, they invest in people. Whether they are pitching an idea to potential investors or convincing a banker to issue a business loan or line of credit, successful entrepreneurs exemplify trustworthiness.
  4. Tenacious – Ever hear the expression the journey to success is a marathon not a sprint? Entrepreneurs who have achieved success are persistent and have that never give up attitude. They push through those times of uncertainty and tackle obstacles for years on end. “Timing, perseverance, and ten years of trying will eventually make you look like an overnight success,” says Biz Stone, co-founder of Twitter.
  5. Accountable – Being accountable starts when you assume responsibility for the outcome of your actions. When it comes to accountability in business, successful business owners know the buck stops with them. Taking responsibility and being accountable for financial decisions you make or don’t make is the key to business success.
  6. Flexible – Be willing and prepared to wear many hats as an entrepreneur. You may need to jump into all aspects of your business. It’s all about being able to adapt, improvise and overcome any of the challenges you face as you grow your business.
  7. Confident – Entrepreneurs face doubt and fears throughout their entrepreneurial journey, not only from other people but also from themselves. It’s the successful entrepreneurs who have confidence when the going gets tough, and stick with it, that reach the highest level of success.
  8. Self-Disciplined – Being in business for yourself requires discipline since you’re the only one looking over your shoulder. Successful business people are notorious for staying on task and avoiding distractions. They work hard and long hours and continue to strive to take their business to the next level.
  9. Decisive – You’ll need to develop a comfort-level with uncertainty at times. Successful entrepreneurs work at gathering as much information as possible, and then make a move. They don’t sit around being indecisive; they are decision makers and get things moving in a timely and efficient manner. “The way to get started is to quit talking and begin doing” says Walt Disney, co-founder of the Walt Disney Company.
  10. Forward thinking – Entrepreneurs see things so much differently than most people do. Where people see problems, they see opportunities. The most successful entrepreneurs all started with a great idea but most importantly had the mindset and vision to see that idea through. They are thinkers, innovators and doers that blaze a trail. Entire industries have started from ideas that others once thought were crazy. Some of our country’s most successful entrepreneurs are the most ambitious and creative people.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

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What to Consider Before You Price Your Products

By bridgetwpollack, Guest Blogger
Published: January 7, 2016 Updated: January 7, 2016

Pricing your products as you launch your small business? It may be worth taking a second look at your pricing strategy.

Sure, you could count your material costs and base your price on that alone, leaving yourself a small profit margin. But have you included the cost of your time and labor? How about transportation, shipping, and taxes?

A holistic approach is necessary to ensure the long-term viability of your business. Failure to consider the full scope of your pricing needs could mean smaller profits, a customer base that dwindles, or even that you might not get a paycheck.

Before you start printing price tags, consider taking an hour to explore a few pricing lessons. The SBA’s Introduction to Pricing self-guided course takes about 30 minutes and illuminates the impact of your pricing strategy on your overall business. SCORE’s Pricing Products and Services webinar lasts about an hour and reviews a variety of pricing scenarios you may encounter.

Whatever your product or service, here are a few items to remember when you’re considering your pricing strategy:

Research the market

Developing a pricing system that works for your business requires taking a critical look at both your competitors and your target market. What are customers willing to pay for what you have to offer? Checking out how much they’re paying at your competitors can help you figure out whether it’s best to compete on price, quality, or overall value.

Consider your sales method

Are you selling directly to customers, or wholesaling your products to retailers? Are you paying sales representatives, or closing deals on your own? Direct sales can ensure that more money stays in your business, but your product may have limited reach.

If you’re selling directly to customers, can they purchase online, or in-store only? If the former, you’ll want to consider the costs of shipping supplies in your pricing formula.

Consider value

If your product or service is unique, don’t feel pressured to lower your price. Instead, focus on the value of your unique product so potential buyers understand what they’ll get for their investment.

Avoid one-size-fits-all pricing

Think about how you like to purchase products or services. Can you offer packages and a la carte buying options for your customers? Having a variety of options ensures that customers find the right fit for them. In addition, offering a package at a slight discount can serve as a low-pressure opportunity to upsell.

Account for sales

If you plan to offer discounts during special promotions, anticipate those discount rates to make sure you won’t lose money during those periods. You may have to raise your prices slightly to account for any discounts offered.

Have a question about how to price your product or service? Call a SCORE mentor to talk through your pricing strategy.

About the Author:

bridgetwpollack
Bridget Weston Pollack

Guest Blogger

Bridget Weston Pollack is the Vice President of Marketing and Communications at the SCORE Association. She is responsible for all branding, marketing, PR, and communication efforts. She focuses on implementing marketing plans and strategies to facilitate the growth of SCORE’s mentoring and trainings services. She collaborates with SCORE volunteers and develops SCORE’s online marketing strategy.

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Start the New Year Off Right: 5 Resolutions for Better Business

By mbramble, Contributor
Published: January 4, 2016 Updated: January 8, 2016

Happy New Year! While everyone is making a slew of personal resolutions it is time for you to make some resolutions to get your business on track. The New Year is the perfect time to reaffirm your business lifestyle and make changes for the betterment of your business. Here are a few tips and resources to help you get started and continue to make progress.

1. Hire New Employees the Right Way

If the New Year means new hires for your business learn more about the process from start to finish. Beginning with the job description all the way to making sure the lines of communication are open with clients and existing employees. The key to this resolution is transparency. Keeping the lines of communication open between all parties benefits everyone in the end.

New Year, New Hires – Growing Your Business With New Employees

2. Review Your Benefits Package

Tailor your benefits plans to the needs of your staff and to your pocketbook. Remember that health coverage and retirement plans are the top two most-valued employee benefits. Having a well thought out, robust plan can be a draw for gaining new employees and maintaining existing ones. Of course you must stay within your means, but reviewing your options before the enrollment period especially with a growing workforce is best.

New Year, New Benefits

3. Invest in Marketing

In the New Year it is time to upgrade your marketing efforts. Now is the perfect time to take stock of the previous year and set some new goals for this year. Investing a little more time and money can go a long way. Set a few goals and be sure to check in regularly to make sure you stay on track.

4 Smart Marketing Resolutions

4. Reach Out More

While your chugging along with day-to-day business it’s easy to forget about the smaller things that can make a real impact on your business. Take some time out to schedule things like networking and training for you and your employees.

Tips for Entrepreneurs

5. Get Serious About Expanding Your Business

There are a number of ways to expand your business. Learn how to decide what the right choice is for your business and how to get started.

Ideas for Growing Your Business

About the Author:

mbramble
Mariama Bramble

Contributor

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6 Steps for Opening a Fitness Center

By mbramble, Contributor
Published: December 23, 2015 Updated: December 23, 2015

Getting fit and staying fit is a state of mind and an entrepreneurial opportunity. According to IHRSA, in the beginning of 2015 there were almost 35,500 U.S. Health clubs, which was up 6.4% over 2014. In 2014, this accounted for a total U.S. Industry Revenue of over $24 billion!

The success of the fitness center Industry has been fueled by many factors – not the least of which is the growing trend among the 80 million plus baby boomers who see staying fit and healthy as an absolute necessity and daily routine.  Also, attrition has gone down because members are reluctant to give up their health club memberships choosing to save money instead on big ticket items such as vacations – reaffirming the fact that “buying” fitness is no longer perceived as a luxury item but a fundamental part of our everyday lives.  

If you are interested in serving this large and ever growing market, below are some things to consider while starting your fitness business.

1. Do Your Homework

Before you get a loan and open your doors, do your market research. You will need this information for your business plan. SBA offers a guide to writing your business plan for help getting the foundation of your business built.

Two of the most important factors you will consider are:

Deciding on your Target Market

You will need to decide which group of people you will serve and how you will serve them. For instance, you may decide that your passion is in indoor cycling and your research shows that there is a need for indoor cycling studios in your target location. You can use free consumer demographic data available through SBA.gov for your research as you narrow down your target market.

Location, Location, Location

Having the right location for your fitness center can make or break your success. If you are difficult to get to or don’t have easy parking you may lose your members. Given that rent may be your biggest expense, finding the right place for the right price in critical. Read ‘Tips for Choosing Your Business Location’ to get more information and explore any additional information you may need.

2. Staffing Your Fitness Center

The next biggest expense after rent is staff costs. You may choose to hire your own fitness instructors, trainers, membership and maintenance staff. Each of these employee groups could be structured differently. Some as full-time employees, some as part-time employees and other as contractors. Choosing and managing this employee structure can be daunting as each has their own taxation and regulatory requirements.

Below are some resources to help you in this process:

3. To Hire or Buy Fitness Equipment?

With fitness technology evolving everyday, how do you balance expenses while still providing your members with the latest fitness equipment and technology. This will depend on your business goals and strategy. But to better understand the leasing process read “Leasing Business Equipment”.

4. Understand Your Financing Options

If traditional financing options aren’t for you, you may look to a government-backed loan. The Small Business Administration (SBA) provides a guaranty to banks and lenders for money lent to small businesses, rather than lending the businesses money directly. 

There are many different types of loans, including the SBA express loan that offers small businesses the chance to get an SBA-backed loan of up to $350,000 to start-up or expand. The “express” piece refers to the fact that your loan can be turned around in 36 hours. 

Read more about SBA loans here and even search for a business loan that fits your need using this small business loans and other financial assistance.

5. The Critical Steps to Starting A Business

Just like any other business, there are a few steps that every entrepreneur needs to take when starting a business. Make sure to have all your boxes checked before opening your doors. Read “10 Steps to Starting A Business” to ensure that you have covered all your bases.

6. Business Insurance

One last thing to ensure that you have covered is your business. Look into the insurance requirements for your state and the available insurance to protect you against workplace injuries and accidents. To learn more about Small Business Insurance read:

Additional Resources

The International Health, Racquet & Sports club Association (IHRSA) offers a wealth of information for fitness center owners including:

About the Author:

mbramble
Mariama Bramble

Contributor

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A Simplified Approach to Setting Small Business Strategy

By Tim Berry, Guest Blogger
Published: December 22, 2015

One of the ironies of strategy, especially in small business, is that it can seem deceptively simple when it’s done right. When it works, it seems like it was always obvious. And yet there are people doing PhD theses on business strategy.

It’s too easy to see when it’s done wrong. For example, the restaurant that wants to appeal to gourmet foodie couples but also has a kids’ menu. Or the idea of discount day-old sushi. Or the computer business that touts great service but fails to install and check the hardware it sells, then hounds customers for slow pay.

Strategy is what you’re not doing. My favorite metaphor is the sculptor with a block of marble — the art is what he chips off the block, not what he leaves in. Michelangelo started with a big chunk of marble and chipped pieces off of it until it was his David. Strategy is focus.

Strategy has to be easy to define. I like with my own identity-market-offering (IMO) method, which is pretty simple. But I’ve also worked in depth, during my consulting years, with several competing strategy frameworks, and every one of them works well if it’s applied correctly and executed.

Business Identity

Every business has its core identity. How are you different from others? What are your strengths and weaknesses? What is your core competence? What are your goals?

As an example, imagine the difference between a bicycle retail store owned and operated by a former professional bike racer, and another one owned and operated by a couple with children who like bicycles as a family activity.

Your business is unique. Think about your goals, your definition of success, and of courses your location, your resources, everything that makes you different. That’s identity.

The Market

Your identity influences your choice of target market. The bike racer focuses on attracting enthusiasts, offering expensive high-end bicycles and equipment. The couple focuses on attracting parents with kids, concentrating on medium-level bikes, trailers, and family-friendly accessories.

Keep your business focused on specific target markets. That bike racer shop owner has to know his products are too expensive for the families, and the families bother the high-end enthusiasts. The family bike shop can’t scare away its target market with very expensive racing bikes.

Offering

Your business offering is your product or service. You can already see with the bike shop example how one shop needs one kind of inventory and the other needs a different kind. That’s strategy at work. Your identity influences your choice of market, which influences your choice of product. Your choice of product influences your choice of market. They have to work together.

Understand that you can’t do everything. The bike shop that caters to families and racers is likely to fail. You can’t credibly offer high-end bicycles at bargain prices in a family-friendly atmosphere. If you say you do, nobody believes you anyhow. So you have to focus. Make this focus mesh with your choice of key target customer and your own business identity. All three concepts have to work together.

Roll Them Up Together

These three things are your business strategy. Don’t pull them apart. Don’t take them one at a time. Don’t ever stop thinking about them. Remember, in planning as well as in all of business, things change. Keep watching for change.

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at leanplan.com .

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The Rise of Online Business Lending and What to Look Out For

By Marco Carbajo, Guest Blogger
Published: December 18, 2015

Small businesses are the lifeblood of the U.S. economy, and financing is the viability of a small business. Small business owners rely on business financing to fuel their growth, to purchase new equipment, hire additional staff, and invest in new opportunities.

Unfortunately, major financial institutions are not lending in amounts under $1 million like they were pre-recession, which means they aren’t lending much to small businesses. “While large business loans have soared to record levels, small business lending is losing ground,” writes Ann Marie Wiersch, a senior policy analyst in the Community Development Department at the Federal Reserve Bank of Cleveland.

In response, a rise in online business lending is sweeping over the small business lending space. In a recent Federal Reserve survey 18% of small business owners reported looking for capital online with a 38% approval rate, compared to a 31% approval rate at large national banks. A new generation of online lenders is surfacing with the promise of an efficient, streamlined application process with quick turn-round (turnaround?) times and higher approval rates.

With online business lending a small business borrower fills out an online application, which generally takes 30-60 minutes. They get a response within hours and can be funded in a matter of days.  This process is an attractive solution for small business owners who on average spend 26 hours on the traditional loan process and wait weeks or even months for an answer from a bank.

Many online business lenders use technology to evaluate the risk of a business differently from traditional lenders. For example, online business lenders may access a company’s online payment transactions and cash flow via their bank accounts or analyze other digital data points to review a business.

Although online business lending offers speed, convenience, and the opportunity to get funding fast, there are important factors small business owners need to look out for.

These factors include but are not limited to the following:

Terms of repayment – Online lenders provide business owners with a variety of repayment terms. Depending on the lender, the short-term business loans may range from 3 to 24 months while the long-term loans range from 1-5 years. It’s also important to note that methods also vary depending on the lender. Some online business lenders require a fixed amount to be paid on a daily or weekly basis via ACH, while others require a traditional monthly payment.

Interest rates – Online business loans tend to have higher interest rates compared to traditional bank loans. Look for online lenders offering competitive interest rates, and keep the loan amount small. Instead of paying thousands of dollars in interest, find a loan with a good interest rate. Although the rates offered online are higher compared to bank loans, they are typically lower than options such as merchant cash advances.

Security – When you apply for a business loan online, it requires you to furnish sensitive data, such as a Social Security number, business information and bank account details. Look for encryption or security measures on the site such as SSL (Secure Socket Layer) encryption and privacy measures – which should be disclosed on the website.

With banks maintaining a tight grip on loans, more and more business owners are turning to online business lending and non-traditional lines of credit for their financing needs. While online business lending has its place in the alternative lending landscape; it’s crucial for small business owners to do their due diligence and research.

Online business lending can be an attractive and viable option. But, hiding behind the flashy websites, impressive videos, and the promise of instant funding, are pricey products that can quickly get a business into trouble if they are not used in the correct way.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

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